rediff.com
News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

Rediff.com  » Business » Here's how the govt earns and spends its rupee
This article was first published 13 years ago

Here's how the govt earns and spends its rupee

Last updated on: February 28, 2011 17:13 IST


Photographs: KBK Graphics

In a good sign, the government will depend less on borrowing to finance budgetary proposals in 2011-12 than in the ongoing 2010-11 financial year.

Borrowings will comprise 27 paise out every rupee that the government plans to spend in 2011-12, compared to 29 paise in the current financial year, as per the proposals presented by Finance Minister Pranab Mukherjee in Parliament on Monday.

As far as expenses are concerned, the central plan will account for 22 paise of every rupee spent, while interest payments will account for an outgo of 18 paise, the second highest expense.

The gross borrowings of the government in 2011-12 are estimated at Rs 4.17 lakh crore (Rs 4.17 trillion), about Rs 40,000 crore (Rs 400 billion) lower than the current fiscal's borrowing plan, which was pegged at Rs 4.47 lakh crore (Rs 4.47 trillion).

. . . 

Here's how the govt earns and spends its rupee


As the single largest source of revenue income, collections from corporate tax are estimated to increase to 24 paise in FY'12 from 23 paise in the current fiscal, indicating an improvement in tax revenue generation.

In addition, income tax will constitute 11 paise out of every rupee earned by the government in the 2011-12 financial year, as against 9 paise in the current fiscal.

This indicates that overall, the direct tax contribution to every rupee earned by the government will be 35 paise.

. . . 

Here's how the govt earns and spends its rupee


An improvement is also seen in indirect tax collection, including service tax and other heads, which are expected to contribute 27 paise to every rupee earned in 2011-12, as against 25 paise in the current fiscal.

Central excise duty will account for 11 paise out of every rupee earned by the government in 2011-12, compared to 10 paise in 2010-11, while service tax and other taxes will constitute 6 paise of every rupee earned.

The contribution of non-tax revenue, however, is projected to come down to 8 paise of every rupee, as against 11 paise in the current fiscal.

. . . 

Here's how the govt earns and spends its rupee


Photographs: Reuters

However, the subsidy burden on the government would remain static at 9 paise and so would the outgo on defence activities, at 11 paise, in 2011-12.

What is more, non-plan expenditure is expected to account for 11 paise of every rupee spent by the government in 2011-12, down from from 13 paise in 2010-11, while the states' share of taxes and duties would amount to 17 paise of every rupee earned, compared to 16 paise in 2010-11.

Plan assistance to states and Union Territories has been retained at 7 paise in 2011-12.

© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.